A flaw with contactless payments, NFC that has been overlooked

For 2000 years man has been using some tangible forms of currency to do trade. Whether it be coins, paper currency or even plastic. In the last 10 years or so we are looking at making the transaction cashless and contactless. This has happened due to two main trends in the world – digitization and going wireless/hassle-less. So why should “Money” be left behind. That’s where NFC, a contactless payment technology comes into picture. Its rate of adoption has not been up to the mark but hype has been. NFC programs got delayed for various reasons and even when they were launched (ISIS, Google wallet) they didn’t get traction for a long period of time. Large retailers are not keen in upgrading their POS terminals as they wish to evaluate other low cost options. The high cost of the NFC terminals is putting big questions on its adoption. There are limited phones in the market with NFC capability along with known brands like iPhone not opting for NFC at all. There were many reasons for the lukewarm response to NFC in the market which you can read here. But some recent flaws have been detected in commercial NFC usage which can seriously affect its adoption if more such cases arise.

The London based public transportation authority had rolled out terminals to enable commuters to pay using their contactless credit and debit cards along with other smart cards. But people are facing glitches while using NFC based transit payment system especially in case of the Underground tube trains. The switch of secure element from phone to SIM had reduced the read speed to above the 500 millisecond cut-off point. The SIM based secure element does not provide the required speed for completing the payment in certain scenarios. For e.g., people using ‘Tube’, the underground train service, find it difficult paying for tickets at the terminal. They want a system where they just have to pass through the terminal while paying using their mobile devices. But the SIM based NFC system gives a time lag in detection at terminals. This is an issue for passengers travelling especially during rush hours.

Disney provides NFC based Magic Band to both its park as well as hotel guests. Terminals have been provisioned across different sites throughout the park and hotels. The NFC based wristband acts as a room key, park entrance ticket as well as debit or credit card for Disney store purchases. But these bands have been giving detection issues in close proximity of the terminals. The bands have to be kept close to the terminal for a longer duration. The terminals give quite a lag in detection of the NFC bands and further reduces the transaction speed than expected.

Shoppers have faced proximity related issues in making NFC based payments. There had been a case when the purchase amount had been charged to the wrong debit card. The customer wanted to use Visa debit card but it got denied and the MasterCard debit card got charged without consent. The glitch detected was that the customer was close enough for the reader to detect the other card and the desired card was not acknowledged by the reader. Such a flaw is prominent since people are used to carrying multiple payment cards.

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